Whether you’re purchasing management rights to holiday, permanent or corporate accommodation, or more specialised complexes like student accommodation or retirement living, it’s important to know what you’re purchasing.
Types of management rights
Typically, when you purchase management rights to a community title scheme, you’re acquiring:
- the ownership of a residential lot (unit, townhouse or apartment) in the complex. The reception and office areas could be on the property manager’s lot title, on a separate title to be purchased by the manager, or they could be set aside by the body corporate for exclusive use of the manager
- the caretaking responsibilities for the common property, such as the pool, gardens and paths, for an agreed remuneration
- the letting agency for other lots in the scheme and receiving payment (commissions) from owners.
Management rights can be purchased in a diverse range of CBD, suburban or tourist locations and may provide accommodation on a holiday, permanent or corporate (short-stay) basis. More specialised complexes that cater for student accommodation and retirement living can also be purchased.
If you’re buying management rights to an established scheme, you and your accountant need to determine how much longer the current agreement has to run, and be satisfied that the remaining time will give you a viable income. The body corporate is under no obligation to renew the agreements, although they frequently do, unless they’re dissatisfied with the manager’s performance.